Final answer:
The right to possess, control, enjoy, and dispose of real property that is protected by a sovereign authority indicates that the person is an owner. Property and contractual rights are crucial for economic growth and are necessary for the operation of efficient markets.
Step-by-step explanation:
When a person's right to possess, control, enjoy, and dispose of real property is recognized and protected by a sovereign power, the person is said to be an owner. Property rights are the legal rights that allow individuals to own, use, and manage private property. A well-established system of property rights, which is enforced by the rule of law, is essential for economic growth and the effective working of markets. Such rights enable individuals to enter into contracts and engage in transactions with confidence that their property will be protected by the legal system in cases of dispute or noncompliance.
Property rights encompass not only the ownership of physical items but also intellectual property such as one's training and experience, which are key to an individual's livelihood. The ability to trade or sell one's property is a fundamental aspect of these rights, contributing to a standard of living increase and the overall productivity of an economy. Without the assurance of property rights and contractual rights, the risks associated with transactions would increase, leading to a slow-down in economic activity and hindering development.